Tough Climb for Quality

The challenge for the next decade will focus on India taking its rightful place amongst the league of nations as an industrialized country.  This will, in turn, entail addressing the question of ‘managing for quality’ in the nineties.

One of the major reasons why Indian exports, as a percentage of world trade, has declined to a dismal 0.4 per cent from about 2 per cent in the fifties is because Indian goods just do not match up to those of our competitors.  The performance is even worse if one takes into account the fact that world trade has grown considerably over the years.  Our competitors are not the US, UK or Japan.  They were countries like South Korea, Taiwan and Singapore who have stolen a march over us.  Even our current competitors like Thailand, Philippines and Indonesia are doing better than India on the export front.

Therefore the big question is, can ‘Made in India’ be a world class certification for Indian goods and services by the year 2000?  The answer is a conditional “yes”.  Conditional because it will depend on the initiative taken by top management on the question of quality.  This will mean starting from the top and working down to the shopfloor.  As one senior executive of a large automobile company put it, “The real bad quality is at the top level of management which incidentally accounts for 80 per cent of the problems”.  Therefore, it makes sense to address the problem of quality to top management and then work downwards.

Quality drive
As mentioned earlier, top management must take the initiative.  By initiative, we mean that the quality goals set must be measurable.  These should take into account customer needs and their satisfaction.  However, this is easier said than done.  To satisfy customer needs one has to first know what they want and what they don’t.  This involves designing the product in a way that meets these needs.

An excellent example of how this is done in practice was shown by Ford Motor Company some years ago when it was designing a new line of cars.  The company first identified about 400 quality characteristics of an automobile that customers feel are important.  They purchased 60 competitors’ cars and invited teams of customers to evaluate each of these characteristics and rate which car was best for each of the features.  So it was found that the Mercedes Benz had the best door handles, the Toyota had the best ignition switch, and so on and so forth.  Ford then assigned each of these qualities to a designer who had to design a new car with a mandate to “beat it or copy it”.  From this exercise came the famous Taurus/Sable cars, which have proved to be very successful.

Competing internationally
Be that as it may, it is competition - be it internal or external - that motivates companies to produce a quality product.  And, the real test of a quality product lies in the international markets.  Therefore, it is imperative to export.  The very process of selling abroad and increasing the market share will induce quality into the product.

Another interesting idea comes from J M Juran, the internationally famous quality guru.  He is of the opinion that the Japanese succeeded in winning export markets because they were “fighting for survival”.  But how does fighting for survival induce quality?  According to a senior executive in the automobile industry, survival meant optimization of resources which would lead to reduction in avoidable waste.  This would also result in higher productivity.  In his opinion Indian companies were not making the best use of scarce resources, be it machine or man.  And especially at a time when the bottom line is under ever increasing pressure.

However, exports need a strong domestic market.  In recent years we have seen a boom in consumerism, mainly because of the burgeoning middle class which is estimated to be in the region of 100 to 125 million people; which incidentally is larger than that in most European and North American countries.  Therefore, in my opinion the domestic base is large enough to produce volumes which is a necessary factor for a successful assault on the export market.

The above goals can only be met if top management can initiate company-wide training programmes.  The emphasis ought to be on doing the “right things” instead of doing “things right” the first time.  As Juran says, it is important to understand in the first place what is the “right thing” and then getting it right.

Managing this change in outlook is one of the major challenges faced by managers.  After changing the priority of quality in a company, top management needs to address the problem of motivating managers to think in terms of quality.  This can be brought into practice by careful job design and action-oriented education.

Today, Indian industry by and large is plagued by high costs and low productivity.  This is because the cost of poor quality is high.  In the US it was found that the cost of poor quality on an average was around 20 to 25 per cent.  In Indian industry it would be much higher.  According to Chandra Mohan, vice-chairman and managing director of Punjab Tractors, in recent years 50 per cent of the annual gains, which directly affects the bottomline, is through improvements in quality.  Therefore, the challenge for the nineties will be how fast Indian industry gears itself for quality.